Another Blow to Obamacare

The majority of Health Care Reform’s provisions will be implemented in 2014.

For Democrats it’s the year they’ve been waiting for where access to health care is greatly expanded with increased government involvement. For Republicans it is a deadline for how much time they have to strip the legislation of whatever teeth it has.

The main provision conservatives are going after is the individual mandate requiring all citizens to have medical coverage. This fight is occurring primarily through the courts and is part of a 26-state lawsuit filed by the Attorneys General in each. There is a philosophical nature to the legal question of the government mandating citizens to purchase a product from a private company – in this case, health insurance.

The other aspect of the battle over health care reform is functional both in terms of financing and creating the structures necessary to the implementation of the law. The major structure that needs to be created under Obamacare is the health insurance exchange.

In order to assist Americans to comply with the individual mandate, health insurance exchanges need to be set up by each state so moderate-income residents and some small businesses can purchase health coverage more affordably. These exchanges go into effect on the same date the individual mandate takes effect – January 2014. However, the deadline for the states is almost a full year earlier than that. The state-based exchanges must be set up in early 2013 because employers must notify their employees of the exchanges in March of 2013. (That’s two “musts” in one sentence because Obamacare mandates a lot of things for Americans to do).

On the federal side, the new Republican majority in the House agreed to a budget deal for the 2011 fiscal year that has also stripped an exchange-related provision of Obamacare – the free choice voucher. This requirement mandated employers to make voucher payments to assist lower-paid employees to buy coverage from the state health exchanges. Employers are no longer obliged to fund these vouchers.

Unfortunately for Democrats, Republicans didn’t just do well in the federal House election. They cleaned up in local elections and Republicans now have full control of 20 state governments – a Republican Governor with Republican majorities in the legislature. Democrats control only 11 states in this manner. The remaining states are split in some fashion.

Some of those 20 Republican-controlled states are refusing to accept the initial federal money to create these exchanges in an attempt to disrupt the implementation of Obamacare.

Tennessee is unsure if they want to set up an exchange. The Supreme Court will hear the Obamacare case late this year at the earliest so the state may be in this limbo for awhile. They are not part of the multi-state lawsuit.

HHS distributed $241 million in Early Innovator Grants in February, awarding funds to seven states that would build the technology infrastructure that other states would use as a model. Three of those states — Oklahoma, Wisconsin and Kansas — are helmed by Republican governors.

Oklahoma has actually filed its own separate lawsuit challenging the Health Care Reform law. Governor Mary Fallin is rejecting $54 million from the federal government and may pursue creating their own exchange. Wisconsin and Kansas are part of the multi-state lawsuit, but have not made a decision on what to do with their Early Innovator Grants.

Texas and Florida are taking the strongest anti-exchange positions. Both states are expecting Health Care Reform to be ruled unconstitutional. This is not surprising for Florida as a judge from Pensacola made the strongest anti-Obamacare ruling… that and Floridians are lazy.

The federal government will ultimately run the exchange in a state that either refuses to set up an exchange or has a sub-standard exchange come 2013. But it seems that some of the states are banking on at least the individual mandate to be declared unconstitutional by the Supreme Court and to possibly parlay that argument into another lawsuit stating that states are no longer mandated to set up exchanges now that there is no requirement for individuals to purchase health insurance.